RISK-BASED BANKING SUPERVISION IN NIGERIA UNDER GLOBAL FINANCIAL UNCERTAINTY

This study investigates the effectiveness of risk-based banking supervision in Nigeria under global financial uncertainty, focusing on the influence of supervisory and risk management practices on the stability of deposit money banks. This study examined the supervisory risk assessment scores, risk-weighted asset ratios, compliance enforcement, credit risk management, and liquidity risk management as explanatory variables of bank stability. A quantitative longitudinal design was employed using panel data from 10 purposively selected Nigerian banks with consistent annual reports between 2012 and 2024. Data were extracted from annual bank reports, Central Bank of Nigeria stability reviews, Nigeria Deposit Insurance Corporation bulletins, and the World Uncertainty Index using a structured abstraction matrix. Bank stability was measured using the Z-score and fixed-effects panel regression was performed in EViews. The SRA score is negative and significant (1.31, p = 0.0142), confirming that higher SRAs reduce bank stability. The CEI is positive but insignificant (0.030, p = 0.3810), indicating that regulatory enforcement has a limited measurable influence on stability. Credit risk management (CRR), proxied by the NPL ratio, is negative and significant (0.842, p = 0.0336), confirming that weak credit quality undermines stability. LQR is positive but insignificant (0.056, p = 0.4310), implying that while liquidity buffers support resilience, their direct contribution to Z-scores is minimal. Finally, the global uncertainty index (GUI) is negative and insignificant (0.047, p = 0.6849), indicating that domestic supervisory and risk management mechanisms are more important for stability than external shocks alone. The World Uncertainty Index, used as a control variable, was also insignificant, indicating that domestic supervisory and risk practices are more important for resilience than global shocks. These findings highlight the need for proactive oversight and stronger credit quality control. The study concludes that Nigeria's RBS framework provides diagnostic value but requires stronger enforcement, dynamic capital monitoring, and stricter credit risk measures. This study demonstrates that supervisory diagnostics and credit risk management are central to banking stability under uncertainty and recommends consistent compliance, enhanced oversight, and recalibrated risk monitoring to strengthen resilience.